Medicare, which runs a vol-
untary program called the
Bundled Payments for Care
Improvement (BPCI) and a
mandatory program called
Comprehensive Care for
Joint Replacement. BPCI
facilities receive payment for
all related items to the care,
including things like the
implant, cost of surgery, physical therapy as well as any costs associ-
ated with post-op complications.
But Medicare's bundled payment programs are currently only avail-
able for inpatient procedures, so surgeons like Dr. Lucy have instead
turned to working with private payers. Though he was already a part
of Medicare's BPCI program, Dr. Lucy saw an opportunity for private
insurers to save money on outpatient total joints while also giving sur-
geons a chance to earn more from these procedures.
His group looked at what insurers were already paying for total joint
patients throughout their episode of care — including items like facili-
ty fees, surgeon, anesthesia, home health care and physical therapy —
and compared how much they could provide those services for in the
outpatient setting. They offered insurers discounted rates while also
leaving enough margin for a healthy profit and to cover the costs of
post-op complications.
"Our philosophy was that since the surgeons make 100% of the clini-
cal decisions and 100% of those decisions make a financial impact on
the episode spend, then who better than the surgeon to enter the risk-
reward scenario," he says.
Winning over insurers is one thing. Winning over docs who do 600 to
M A Y 2 0 1 8 • O U T PA T I E N TS U R G E R Y. N E T • 4 7
"There's a lot of variation
across total joint cases
that can be smoothed out
and waste that can
be cut out."
— Amol Navathe, MD, PhD
